Microsoft Dynamics 365 Blog

Tag: D365

Modernizing Your Project Management & Accounting (PMA): Why It’s Time to Upgrade to the Dynamics 365 Project Operations Modern Architecture
In the era AI‑powered business applications, project‑based organizations need more than accurate accounting. They need agility, end‑to‑end visibility, and connected processes to deliver profitable and predictable outcomes.

Many organizations still rely on the legacy Project Management and Accounting (PMA) module in Dynamics 365 Finance & Operations. While PMA has served businesses well for project financial control, it falls short in modern project planning, resource optimization, integrated sales, and collaboration capabilities.

Microsoft’s modern architecture for Dynamics 365 Project Operations bridges this gap by combining the financial rigor of PMA with next‑generation, AI‑enabled project capabilities built on Dataverse. This evolution is not just a technical upgrade; it’s a strategic shift to future‑proof your business and unlock meaningful efficiency gains.

This post is for project and service‑based organizations using PMA today who are evaluating their journey toward the modern architecture.

Why Legacy PMA is Holding you back:

Organizations still using PMA often face:
- Fragmented project planning and resource management
- Limited collaboration across sales, delivery, and finance
- Outdated and siloed technology
- Quite a bit of manual processes
- Limited scalability for modern operating models
PMA provides strong accounting, but lacks the integrated, AI‑enhanced capabilities needed for today’s project‑centric enterprises.

What is the Modern Architecture vs Legacy PMA:

Legacy PMA (Your current state)
- Fully embedded in Finance & Operations
- Handles project creation, basic scheduling, time & expense, invoicing, and revenue recognition
- Limited sales integration
- No modern AI or Dataverse-native capabilities
Modern Architecture (Your future state)
- Sales, planning, resource management, and project operations run on Dataverse with Dynamics 365 Project Operations all in one connected flow.
- Financials, invoicing, and accounting remain in Dynamics 365 F&O
- Synchronized financials to ERP via out of the box dual-write
- Enables rich planning, AI, automation, analytics, and collaboration
This hybrid model gives you the best of both platforms.

Why is it important for Executives and Business Leadership:

AI powered project planning:

Built-in Planner P3 capabilities, including Copilot-assisted WBS creation, risk assessments, and status reporting accelerate delivery and improve accuracy.

Agentic AI Automation

Intelligent agents reduce operational overhead by automating time & expense entry, approvals, reconciliations, and monitoring.

Smarter, More Reliable Finance

Connected processes from Quote → Contract → Project → Revenue Recognition reduce errors, shorten billing cycles, and improve reporting.

Unified Platform For your Service, Projects and Financial Ops

Modern planning and resource management on Dataverse works seamlessly with F&O’s proven accounting, connected through dual-write. Out of the box integration of Field Service operations with Projects enables seamless workflows from “field to financials”.

Low-Risk Transition Path

Starting in version 10.0.45/10.0.46, Microsoft allows PMA customers to include the same legal entity in the modern architecture.
You can:
- Continue and close PMA projects
- Create new projects in the modern architecture
- Avoid heavy code or data migration investments
Future-Ready Foundation with a really well-defined roadmap

Built on Power Platform, enabling continuous innovation with AI, process automation, and analytics. The roadmap for the modern architecture is compelling with robust features such as change orders, AI agents, what-if analysis and more.

Key Capabilities You Get in the Modern Architecture
- AI driven Project Planning with Microsoft Planner P3 built-in: Intuitive, timeline-based planning powered by AI.
- Unified Resource Management: Seamless resource scheduling and utilization across roles.
- Modern Contract Structure and Pricing: Richer quoting built on D365 Sales/CRM capabilities and flexible contract modeling and dimension-based pricing with a unified business process flow.
- Subcontracting: Fully integrated with D365 F&O Procurement providing end- to end capabilities from subcontract modeling, T&E, invoicing with 2-way and 3-way matching and integrated vendor invoicing.
- Agentic T&E Entry and Approvals Management: Game changing T&E entry and approvals management saving significant time for your resources and PMs.
- Billing Hub with modern invoicing and KPIs
- Dual-write Integration out of the box: Real-time syncing of data between Dataverse and F&O out of the box takes the burden off of you where you don’t have to custom integrate your CRM with ERP. This is a HUGE relief for customers where they do not have to maintain the technical debt of custom integrations. Along with all the modern functionality you will get, this alone should be one of the primary drivers for you to consider the move to the modern architecture.
- D365 Field Service’s native integration with project operations streamlines your service business integrating seamlessly with projects and financials workloads out of the box.
How is Microsoft Enabling this transition:

Starting with the version 10.0.45/10.0.46, if you are using the PMA module to manage your projects under a legal entity in your existing D365 F&O environment, you can include the same legal entity in the modern architecture.

Microsoft’s goal here is not provide full PMA capabilities and the modern architecture capabilities within the same legal entity in F&O. This functionality of allowing the co-existence of the some of the legacy PMA functionality is primarily to provide customers a path to close out projects they started in the PMA in D365 F&O and create any new projects going forward using the modern architecture.

This is great news for you as a customer, where you will NOT have to spend time and money on significant technical code migration or data migration efforts to move over to the modern architecture. You will have most of the key functionality/processes you need to close out your PMA projects and then take the opportunity to evaluate your holistic “project to Profit” business processes and take advantages of the functionalities available in the modern architecture for new projects post migration.

Some Technical and Functional Details:

Here are some of the high-level steps of how you can enable this migration.

You will first need to include the legal entity where you are using the PMA module in the global parameters in order to enable the modern architecture of Project Operations.

You can then go through the technical steps of including that legal entity in the dual-write integration keys and likely perform an initial sync to get the foundational entities initial synced between F&O and Dataverse. This is a requirement for the modern architecture.

With those in place, when you go look at your projects that were created with the PMA solution will have limited features and functionality available which provides you pretty much everything you need in order to execute the remainder of those projects and eventually close them out.

Below are the features that are available for closing out the PMA projects.
1. Manage Project stage transitions
2. Manage Ledger postings configurations
3. Setup/update cost prices and sales prices
4. Process Hour/Expense/Item/Fee journals to update costs/revenues and general journals on projects if required.
5. Process project item requirements.
6. Create or complete purchase orders, requisitions, RFQ, agreements linked with the PMA project.
7. Create/Update on-account transactions.
8. Project Expense reports.
9. Create and post project invoice, credit notes and customer advances.
10. Revenue Recognition processing.
11. Intercompany invoicing
Below are the features that are NOT available for the PMA projects:
1. Adding advanced project contract details such as billing rules, multiple funding sources, rules and limits are not available. This can be a key consideration if you are using this functionality in the PMA. Before you enable the modern architecture, you need to ensure that all your contract definitions are up to date so that you can continue executing the billing for the contract/project. It is likely that you may find some contracts which will end up being candidates to be migrated to the modern architecture.
2. As of 10.0.46 release, Project Timesheet Entry is not available. This means you will need to rely on Hours journal entry to account for the hours for resources for the remainder of the project. I can see this being an issue for some customers especially if they are using a lot of intercompany timesheets.
3. Cannot edit project forecasts or budgets: Should not be a deal breaker and there are ways to make get around this constraint.
4. Below screenshot shows legacy PMA and Modern architecture projects existing in the same legal entity in F&O.
Conclusion:

The move from the legacy PMA module to the modern architecture is more than a technical upgrade, it’s an opportunity to rethink and elevate your entire “Project to Profit” lifecycle. With AI‑driven planning, agentic automation, unified resource management, and F&O’s trusted financial capabilities, organizations can reduce operational overhead, accelerate execution, and improve profitability.

With coexistence support now available in version 10.0.46, PMA customers can modernize with minimal disruption, closing existing projects while launching new ones on a future‑ready platform.

Regards,

Sandeep
January 15, 2026
Unlock faster time tracking, approvals, reduced revenue leakage, and accelerated billing with the new Time and Expense Agent in D365 Project Operations
For project and service driven organizations, accurately capturing and processing time and expenses is a balancing act between operational efficiency and revenue integrity. Manual entry delays, inconsistent submissions, and incomplete data can cause serious ripple effects—ranging from incorrect approvals, billing errors to delayed client invoicing and, ultimately, revenue leakage.

Enter the new Time & Expense agent in Microsoft Dynamics 365 Project Operations, a game-changer designed to automate and streamline this critical process. Built on Microsoft Copilot Studio and the Power Platform, this intelligent agent not only empowers your employees to submit time and expense entries more quickly and accurately by staying in their flow of work within Microsoft Teams but also automates T&E reviews for project managers giving real-time visibility into project costs. The result? Faster time and expense approvals processing cycles, improved project accounting, and minimized revenue loss.

The Agent is now in Production Ready Preview! If you’ve updated your solution to version 4.140.0.239 or later, you should already see it in action. While I’m still diving into the details of the Time and Expense Entry experience, I wanted to share a few quick thoughts on the Approvals Experience today. More insights to come soon—stay tuned!

The new T&E Agent in Project Operations will transform the way your organization thinks about processing T&E entries and approvals. By simply uploading your organization’s T&E policy document, the agent intelligently interprets approval rules—automatically distinguishing which entries are “Ready to Approve” and which ones “Need Review.”

Furthermore, it can process approvals for compliant entries on its own, significantly reducing the manual effort involved in reviewing each submission. This means project managers and approvers can focus their attention where it’s truly needed, while the agent takes care of the rest.

The T&E policy document can look something like the below screenshot.

You can just upload the policy document into D365 Project Operations under the Agent setup parameter area and agent does the rest of the work for you.

Now that the policy document is in place, let’s see how the approval experience helps accelerate the T&E approvals.

Let’s now go ahead and create, submit time entry. Bye the way, screenshot below shows the newly released Calendar view of the time entry which is Awesome. I strongly recommend you explore this further!

Under the hood is an Approvals agent trigger which is a Cloud Flow that runs on a recurrence and gets the input parameters of each time entry lines that were submitted, parses JSON and passes on the dataset to the Copilot agent in Copilot studio.

The agent configured in Copilot Studio has the detailed instructions, access to the policy document that we uploaded in Project Operations and agent tools (AIPlugin actions) to process the approval actions.

Let’s now get back to D365 Project Operations and see how the agent flagged and/approved the submitted time entries. You can see the agent was able to flag the time entries as “Needs review” since they violated several of the policies. However, it was able to automatically approve the time I submitted on the “Holiday” project since my policy had an exception for that.

It looks like our organization’s T&E policies are quite detailed—they even account for factors like resource assignment periods, task start and end dates and require all time entries to align with those parameters. The good news? The new agent gives you full flexibility to configure approval rules based on what best suits your business. Whether your policies are light-touch or highly granular, the agent adapts to reflect your organization’s expectations.

Notice the agent was able not only able to flag but also was able to tell what policy the time entry line violated. From here, the approvers can take further actions on the time entry such as Approve/Reject or reassign to agent.

So, what are the key take aways and how does the Approvals Agent benefit your organization?
1. With the T&E agent, what was once a reactive, error-prone process is now a proactive, intelligent system that supports compliance, accelerates cash flow, and empowers teams to focus on delivering value—not chasing down hours and receipts.
2. Reduces administrative effort and approval errors for Project Managers while speeding up T&E processing and project throughput. Project Managers gets to focus only on the flagged transactions and not thousands of lines that already meets the policies of the organization.
3. Accelerates billing and enhances financial accuracy through automated, compliant time approvals. As long as time entries meet policies, they are automatically approved.
4. As your organization adopts new changes according to changing business conditions, they just need to keep their policy document up to date and upload them in Project Operations and the agent will keep up.
Next up, we will see how the Time and Expense Entry experience of the agent works and how it can benefit you.

Stay tuned!
June 23, 2025
Some useful new features of Dynamics 365 for Finance and Operations version 8.1 under Core Financials management module – Part 1
The October 2018 release of Dynamics 365 for Finance and Operations (Version 8.1) introduced several new and very useful features in the core financials management area of the application, along with several other new functionality and enhancements across various other modules, analytics, overall platform, extensibility and more.

In this blog post, we will review some of the key new features under the core financials area, which a lot of end users will certainly fall in love with.

Central view of Settlement Transactions: In the past, when you had to see the settlements on a customer or vendor transaction, you always had to make a few clicks and jump to more than one screen to find the relevant information, which was time consuming. With the new “View Settlement” form/option on the Customer and Vendor transactions form, you can now see the full settlement details, related transactions, accounting, history and more, all at one place. Here is an example.

A customer invoice is posted: The View settlements form shows just the required details of the invoice.

Let us now settle this invoice against a customer payment along with some cash discount. Here is what you see in the view settlement form.

On this new “View Settlements” form, you can,
- View any related transaction lines for the invoice, payment, cash discount lines etc.
- You can dig into the Settlement history, if there a transaction was settles, unsettled multiple times.
- You can view the accounting entries directly from this screen, for each individual line.
- You can also initiate the Undo Settlement process from this new form.
Customer and Vendor data field change approvals: On the Customer and Vendor master records, if you want approval process to be in place, when certain data fields are changed on the customer or vendor records, you can now enable that functionality optionally. This is a pretty neat feature, which let’s you chose which data fields you want to control from being changed accidentally, and then configure a detailed one or multi step approval process, so that the changes can be reviewed and approved, before the new field value comes into effect for the customer or vendor. In the post today, we will see this on the Customer side, but it is the same functionality on the vendor side as well.

So the first step is to Enable the approval process. As i mentioned, this is completely optional and if you do not need, you just leave the feature turned OFF. To enable this, go to Accounts Receivable > Setup > AR Parameters form and mark the “Enable customer approval” check box under the General tab.

Enable Customer fields approval

The next step is to actually configure the approval workflow, which will be used for routing the proposed customer account changes for review and approval. This workflow is similar to other workflows in the system. In my case, i have setup a basic workflow with just one step approval process.

Once you have the workflow configured, let us now see this functionality in action. Navigate to the customer master and you will notice that the data fields you selected in the parameter screen , will now show as “requires approval” indicator. This is super helpful and easily tells the user that this field if changes will require approval. Let’s try to change the customer credit limit and customer group field.

Let’s try to change the customer credit limit and customer group field. When you save the changes, system will create and show the change proposal, which shows both current values and the proposed changed. At this point, the user if wishes, can discard the changes they made.

Notice now that the status of the Customer account says “Changes not submitted”.

One important thing to note here is, when the changes to the data fields are in process, you can still transact with the customer. System will just use the current values.

Once you are done with the changes, click Workflow > Submit to submit the changes to the workflow for review and approval. When the changes gets assigned to the approver, they can view the Proposed changes on the customer record directly.

Important note: There is a periodic option to submit all changes created for customer accounts in bulk. You can do it both manually and in the background/batch.

The changes to the data fields will come into effect after the change proposal has been approved. It works the same way for vendor records as well.

Financial Dimension values on Derived Dimensions: In many of the implementations I have done, a common requirement we here is to have some of the master records such as Item, Project, Customer etc. to be configured as one of the financial dimensions, so that customers can do adequate financial reporting on those. We use Derived dimension values for this and often end up having to select the financial dimension value manually on the master data record or we end up doing additional customization to automatically populate this value when new records are created in the master data table.

With this new functionality, you do not need to do any customization or even setup the dimension value manually when new records are created. If enabled, the system will automatically set these up now. Let us see this in action.

Additionally, there is another new functionality available on the financial dimensions area, where you can now setup certain dimension values to be defaulted when you select another dimension value. For example, when you select a specific business unit, you can have the system automatically default a cost center value for you.

To set this up, go under Financial dimensions > Select the dimension record and click Derived dimensions button. Here you can setup the value combinations of the defaulting of dimensions.

In this case, i have setup to default Cost center and Department values to be defaulted when i select a certain business unit.”. Let us see this in action.

With the above setup, when I select Business Unit dimension on a master record setup such as Project/Customer or anything else, the Cost center and Department dimensions will be auto populated, and i do not see to select them specifically. This is a pretty handy feature and will certainly save a lot of time for users in some cases.

For example, when i select Business unit 001 on my customer record, the Cost center and Department values auto populates to what i have setup.

The same defaulting functionality works on journal entry as well. For example, when I do a general journal entry and select the Business Unit dimension, i can have other dimension values defaulted (as long as they pass other account structure related validations)

Financial Journal Validation: Additional functionality to simulate posting during journal validation is available, which allows you to basically run the whole posting process, without actually posting the journal. As a result, you can see the possible errors, messages or warnings and you can take corrective actions on the journal.

Global Shared Number Sequence for Customers and Vendors: The global shared number sequence functionality allows you to use a single number sequence across many legal entities for customers and vendors. With this, you can also copy customers and vendors easily between legal entities. Since you cannot share master data using virtual companies anymore in D365 F&O, this might be a functionality you want to use to share the customer or vendor master if needed in your implementation.

Note: This functionality is not a replacement of the Virtual company feature by any means. It is just a possible alternate that can be leveraged to have same customer ID and info for one customer across multiple entities, but they will live as separate data records and have their own transactions.

The first thing you have to do is configure a Shared number sequence and then you will need to select the same shared number sequence under the Number sequence parameter.

Then you need to make sure you select the same number sequence code for the customer account under the AR parameters page in all the entities where you want to use the shared customer account ID.

With that setup, let us now see how you can copy customer accounts from one entity to another and they will use the same customer account number and other related info for the customer.

In USSI entity, I created a new customer account. Notice that when i create the new customer, system does not assign a Customer account number immediately. This is because, if you want to copy the customer from another entity, it will use the same customer account number. If not, it will assign a new shared number after you save the details on the customer. (We will see this copying feature when we create this same customer in another entity USMF).

Now i have filled the required details for this new customer and i save the data. System assigned a customer account number using the shared number sequence we had setup.

We will now copy the customer in the USMF entity. Let us see how that process looks like. I will navigate to the Customer master in the USMF entity and click New on the All Customers page, and then i will type in the customer name i want to copy. System will automatically find the match and if they are an existing customer in another entity, it will present an option to copy the customer account.

You will now see that the Customer information is copied into the USMF entity and it used the same Customer account number.

Note: You will need to make sure all the dependent data fields for the customer account are correctly setup in both entities.

Now that we have the shared customer account numbers setup and customer accounts copied, let us look at another new feature that complements this feature.

Global Customer and Vendor Transactions List page: If you are using shared number sequence for customers/vendors and have copied the accounts between multiple entities, you would obviously want to see a centralized view where you can see the transactions of the customer of vendor in all the entities they are copied in. I have already posted some transactions for this new customer “Marshal’s New store” in both USSI and USMF entities.

Invoice posted in USSI:

Invoice Posted in USMF:

Let’s see how the look in the new global transactions list page. I am in the USMF entity now and i will navigate to the global transactions list page.

Notice that the new page shows me all the transactions for this customer account form multiple entities. You will notice here that when you select the transaction for the specific entity on this page, the system automatically switches the company account, so that you can perform required operations on the transaction correctly.

That’s it for today’s post. In the next post, we will discuss in detail about another new feature in the core financials module called ‘Dual currency” and learn how it works and what are some of the significant changes that were introduced as part of this functionality.

Till next time !!!
January 17, 2019